SEMI trade mission finds incentives from China

02/01/1998

SEMI trade mission finds incentives from China

A group of equipment and materials executives visiting China on a SEMI-sponsored trade mission found continued evidence that the nation is eager to attract semiconductor manufacturing technology to its industrial zones, with industrial parks offering incentive packages to companies locating there.

The Chinese government has made the growth of its semiconductor sector a high national priority, although early output from advanced fabs on the mainland will likely be sent abroad as internal demand materializes. "At the beginning, it will be mostly for export, but even at this point, China only produces about 20% of what it needs in terms of chips," commented Jennifer Connell-Dowling, SEMI`s manager of public policy. "By 2000, their IC demand will be about 4 billion units/year, and they hope to produce half of that internally."

About 70 executives from companies in the US, Europe, and virtually every Pacific Rim nation made the trip, which visited government, academic, and industrial facilities in several major high-tech areas including Shenzen, Pudong, and the newly added Hong Kong. "They`re trying to make it very attractive in the industrial parks, not just for chipmakers but for the supplier companies as well - they want to expand the scope of foreign investment," said Connell-Dowling.

"Each industrial park and economic zone has a package of fairly complex tax incentives, as well as access to power and water facilities, and even the kind of workers who can be hired. They want to be one-stop shopping, and help cut through the import-export red tape and recruiting." The industrial parks, she noted, are staffed by local and regional governments, which are eager to bring business there in line with common international practices.

Connell-Dowling added that there is still "some uncertainty" surrounding US policy regarding high-tech exports to China, but said, "It`s clear that China is very intent on modernizing its semiconductor market, and that they see it as a key to economic development - not for military reasons." She said SEMI is continuing its work with members of Congress and the Clinton Administration on the issue, and said the messages received during Chinese president Jiang Zemin`s recent visit to the US were encouraging. "As (US officials) get assurances from the Chinese government that the equipment and materials are not being used in ways that threaten national security, there should be more freedom to export."-P.N.D.